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The Changing Nature of Technology- Based Industry in Washington State: Perspectives from 7 Technology Alliance Sponsored Studies William B. Beyers Department of Geography University of Washington Seattle, WA Seattle Economists Club June 13, 2012

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Outline Defining Technology-Based Industry The Changing Nature of R&D – WA vs. Other States Current Employment Trends in Employment The Changing Geography of Tech-Based Industry Changes in Economic Impacts

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The Technology Alliance Technology- Based Industry Economic Impact Studies Studies have been benchmarked against the years 2005, 2007, 2000, 2003, 2007, 2009, and 2011 They have tried to use a consistent methodology Changes in underlying data sources have made this difficult We are unaware of any similar legacy of studies of this type

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Defining Technology-Based Industry Many definitions of high tech Some are based on % of sales related to R&D, some based on arbitrary definitions of industries included, some based on % of R&D related occupations Early Technology Alliance economic impact studies defined technology-based industries as those with at least 10% of their workforce in R&D related occupations Starting in 2008, we defined tech-based industry as those with double the state average in R&D employment for all industries. In the current study, that threshold is 16.2% (up from 15.6 in 2010). This definition leads to some changes in industries included in the study, but other factors also lead to changes to industry inclusion (shift to NAICS, occupational structural change) After careful inspection of occupational structure, we included two industries with less than 16.2% R&D related occupations (electronic shopping & waste treatment/disposal)

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Concluding Comments Washington has strong technology-based industry, but it has changed over time The occupational foundation for defining technology-based industry continues to rise Our R&D position relative to other states has also risen Service industry components of technology-based industry have continued to expand While these industries are strongly concentrated in the Puget Sound region, there has been geographical spread to other parts of the state Growth of technology-based industry has been faster than the state average, leading to growth in economic impacts that have also gradually risen. Thanks to the Technology Alliance for supporting this unique set of portraits of technology-based industry in Washington State